Newsletter: German Federal Cartel Office permits operation of a digital agricultural trade platform

(Cologne, 4 March 2020)

 

The German Federal Cartel Office [Bundeskartellamt] has given the go-ahead for the launch of the digital trading platform "Unamera" (the Bundeskartellamt’s press release). The platform is intended to facilitate trade in agricultural products (especially for grains and oilseeds) between agricultural traders and farmers as well as processors. However, certain structural conditions must be met.

 

1. Authority sees efficiency gains through digital trading platforms

Already in 2018 the Bundeskartellamt had no objections to the introduction of the B2B trading platform "XOM Metals" on which steel manufacturers and steel traders can offer their products (click here for the case report). Digital trading platforms usually increase efficiency and lead to improved and more cost-effective products and production processes. However, they must comply with antitrust requirements.

 

2. "Basic rules" under cartel law for the design of a platform

In the Bundeskartellamt's view digital trading platforms must comply with certain "basic rules", especially if those platforms are (also) used by competitors:

  • Platforms must not lead to an excessive increase of market transparency.
  • Competitors must not be able to use platforms to fix prices.
  • The exchange of competition-relevant information must be limited. "Chinese Walls" must ensure this, especially with regard to the identity of trading partners and market statistics.
  • Platforms must not have a discriminatory effect.

 

3. Implementation of the Bundeskartellamt's requirements

To implement these requirements, the Bundeskartellamt has developed a number of criteria in the two cases mentioned above:

  • "Chinese Walls" for suppliers: A technically secure, isolated area in which each supplier has access only to the customer data of its own customers must prevent an illegal exchange of information between competitors.
  • If the operator of the platform is active on the same market as the platform users, the operator may not have access to competitively relevant information of other users. A separation in terms of personnel, organisation, information and technology between the platform and the operator's other business areas must be ensured. Rights to information and inspection existing under the German Limited Liability Company Act [GmbH Gesetz] must be excluded to the extent required by antitrust law.
  • Customers and traders must register in an identifiable way (e.g. using their tax identification number). Customers may only view further information, such as prices, in the login area.
  • Prices should initially be displayed anonymously. Only in the last step before the contract is concluded should the identity of the trader be disclosed. This is to prevent price agreements between suppliers.
  • If market statistics are to be published, they must be aggregated. For prices, this means that only the average price, calculated from the price of at least five independent companies, may be displayed.

 

4. Outlook

The criteria developed by the Bundeskartellamt offer companies a first orientation for cooperation in the field of digital trading platforms. Further information on the design of B2B platforms in conformity with competition law can be found in the Bundeskartellamt's working paper on market power of platforms and networks.

However, the Bundeskartellamt highlights that each cooperation must be evaluated individually and in relation to the market. The concrete design of the platform structure is therefore decisive for its admissibility under competition law. In cases of doubt the Bundeskartellamt can be used as a sparring partner to clarify antitrust issues.

 

If you have any questions, please do not hesitate to contact one of our legal experts.

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Dr. Simon Spangler<br/>LL.M. (UCT)

Dr. Simon Spangler
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Dr. Andrés Martin-Ehlers<br/>LL.M. (London)

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